Small business optimism has soared in the days and weeks following Election Day, according to a recent study by the National Federation of Independent Business.
Optimism among U.S. small business owners had remained flat in the months leading up to the 2016 U.S. presidential election on Nov. 8, according to the NFIB “Index of Small Business Optimism” released Dec. 13.
“What a difference a day makes,” NFIB President and CEO Juanita Duggan said in a news release announcing the study’s findings. “Before Election Day, small business owners’ optimism was flat, and after Election Day it soared.”
The study is based on a survey of small business owners in which they are asked about business expectations and plans to hire and grow. According to the NFIB, small business optimism remained unchanged until Election Day and then “rose dramatically after the results of the election were known.”
At the end of November, the Index of Small Business Optimism had improved 3.5 points to 98.4, “which is just above the 42-year average and only the third time since 2007 that it has broken into above average territory,” according to the release.
In general, the small businesses surveyed were more optimistic about plans to hire and anticipated higher sales and a better business climate under the new administration of President-elect Donald Trump.
“Even without separating the data, the November results paint a starkly different picture than what we’ve seen in the last 94 months,” NFIB Chief Economist Bill Dunkelberg said in the release. “If higher optimism can be sustained, I expect that in the coming months we’ll see an increase in business activity, such as hiring and expanding.”
According to the NFIB, sustained optimism and what impact it will have on the economy will depend on whether Trump keeps campaign promises related to tax cuts, deregulation and a repeal of the Affordable Care Act.